jU^'- 


^^(S^.^jAiU^,    Sjc-^ 


*  [Senate   Report,  No.   9.] 

April  6,  ISG3.    Three  hundred  copies  ordered  to  be  printed. 

rt E  F  o  r^T 

OF    THE  ' 

COMMUTE  E  ON  F 1 N  A  N  C  E 

ON   THE   BILL  (U.  P.  IS^  TO  LAY    TAXES    FOR   THE  COMMON  DE 

FENCE,  AND  CARRY  ON   THE  GOVERNMENT  OF 

THE  CONFEDERATE  STATES. 


The  Gmnraitteo  on  Finance,  to  whom  was  referred  the  bill  (II.  R, 
18)  to  lay  taxes  for  the  common  defence  and  carry  on  the  govern- 
ment of  the  Confederate  States,  have  had  the  same  under  considera- 
tion and  beg  leave  to  submit  the  following  report : 

The  emergency  which  calls  for  a  law  imposing  a  large  and  sufficient 
rate  of  taxation,  is  doubtless  of  the  gravest  character,  and  the  most 
earncEt  efforts  are  required  on  the  part  of  Congress  to  provide  the 
meais  for  prosecuting  the  war  in  which  we  are  engaged,  andto devise 
Buch  measures  as  may  ])e  adequate  to  sustain  the  public  credit.  In- 
deed, the  two  things  are  intimately  co:3nected  with  each  other,  and 
toust  of  necessity  be  considered  together.  If  the  annual  supplies, 
which  are  necessary  for  "the  war.  shall  be  purchased  in  a  constantly 
depreciating  currency,  it  is  manifest  that  the  debt  which  must  be  con- 
tracted. Avill  very  far  exceed  in  i*s  nominal  amount  the  actunl  values 
received  in  return  for  it,  and  increase  in  a  ratio  so  rapidly  progressive, 
as  to  swell  beyond  the  capacity  of  the  people  for  payment,  no  matter 
how  faithfully  disposed  they  ii.ay  be  to  meet  all  their  engagements. 
Nor  is  this  the  only  difficulty  in  the  way  of  a  successful  prosecution 
of  the  war,  which  i;*  interposed  by  a  progressive  depreciation  in  the 
currency.  The  tendency  of  such  a  state  of  things,  is  not  only  to 
force  the  government  to  give  excessive  and  ruinous  prices  for  all  that 
it  buys,  but  also  to  induce  persons  to  hold  and  hoard  up  supplies 
necepsary  for  the  army,  under  the  expectation,  certain  to  be  realised, 


of  receiving  large  profits  from  tlie  increase  of  prices,  which  must  re- 
sult from  the  constant  expansion  in  the  vclunie  of  the  currency.  Ex- 
perience and  theory  have  both  shown  that  this  condition  of  the  curren- 
cy holds  out  the  strongest  temptation  to  withhold  supplies  from  maikct 
and  speculate  upon  the  rise  of  prices  which  must  necessarily  occur. 
Hat  the  symptoms  and  the  consecjuences  of  a  diseased  state  of  the 
currency  are  so  well  known,  that  it  is  needless  to  describe  them. 
Nations  have  so  often  fallen  into  an  extravagant  use  of  credit,  tjiat  the 
disease  which  it  engenders  is  now  understood  by  all.  Nor  has^human 
wit  devised  any  other  remedy  than  that  of  taxation  and  a  return  as 
speedy  as  circumstances  may  justify,  to  a  sound  standard  of  value 
by  which  the  future  obligations  of  the  nation  may  be  measured.  Hap- 
pily for  the  country,  the  evil  has  not  yet  reached  a  point  where  it  i;* 
beyond  cure,  and  the  attention  of  Congress  has  already  been  earnestly 
turned^ to  a  series  of  measures  which  it  is  believed  will  rempdy  the 
mischief.  It  being  obvious  that  the  measures  proper  to  sustain  the 
public  credit,  \>ould  require  some  time  to  produce  the  effects  designed, 
it  was  deeme<l  necessary  to  do  something  which  would  check  in  some 
degree  the  tendency  to  hoard  sup|)lies  necessary  for  the  immediate  uses 
of  the  army,  and  to  obtain  such  supplies  at  rates  which  would  not  be 
ruinous  to  the  government.  To  obtain  a  temporary  relief  and  to  give 
time  for  the  operation  of  the  other  measures  to  bring  the  whole  subject 
under  the  self  x'xecuting  laws  of  trade,  an  impressment  bill  has  been 
passed  so  as  to  enable  the  government  to  seize  supplies  up  ai  giving 
a  just  compensation  for  them.  The  provision  incorporated  into  this 
bill,  which  empowered  commissioners  to  fix  this  compensation  for 
periods  of  two  months,  will  probably  have  t'e  effect  to  check  the  dis- 
position with  speculators  to  buy  up  supplies  and  hoard  them  for  a 
future  rise  of  prices.  Knowing  that  the  prices  will  be  fixed  for  two 
months,  and  that  the  government  may  seize  them  at  these  prices,  they 
Avill  probably  buy  only  with  a  view  to  sell  at  these  prices,  and  it  is 
to  be  hoped  that  thus  articles  necessary  for  the  subsistence  of  the  army 
and  for  the  forage  of  horses,  will  be  withdrawn  from  their  hiding 
})laces  and  exposed  for  sale.  For  it  is  probable  that  the  prices  thus 
fixed  will  rule  generally  in  the  markets  of  the  country.  But  this 
.system  of  impressment  which  may  be  justly  used  as  the  extreme 
medicine,  cannot  be  relied  upon  for  daily  food.  For  the  permanent 
sup[)ly  of  the  army,  we  must  depend  upon  a  proper  use  of  the  public 
credit  and  a  just  system  of  taxation  upon  the  people.  Since  the 
invention  cf  the  funding  system,  which  enables  one  generation  to 
impcse  the  nayment  of  its  debts  upon  its  successors,  wars  are  waged 
upon  a  scale  of  such  magnitude,  that  no  people  can  hope  to  pay  its 
expenses,  a«  they  occur,  by  any  system  of  taxation  for  the  time. 

Their  chie^f  reliance  for  the  moans  qf  prosecuting  war  must  be  upon 
their  credit,  and  the  generaiion  which  makes  the  war,  leave  the  pri)ici- 
pal  or  the  greater  part  of  the  principal  of  the  debt  which  it  occasions 
to  be  paid  by  posterity.  JJut  in  justice  to  those  who  may  come  after 
it,  the  value  of  this  credit  should  be  so  maintained  as  to  make  the  debt 
to  be  paid  by  posterity  as  sm:dl  as  possible.  If  the  generation  ma- 
king the  war  will  lay  taxes  to  raise  money  enough  to  pay  the  annual 


expenses  of  the  government  for  all  purposes  otlier  than  thoee  of 
the  Avar,  and  to  pay  the  interest  of  the  debt  contracted,  leaving  a  small 
surplus  for  its  gradual  extinction,  it  will  do  as  much  as  nations  usually 
do  during  the  actual  prosecution  of  hostilities.  For  it  is  obvious  that, 
if  iaxcs  are  thus  increased  as  the  debts  increase,  provision  will  be 
made.  These  taxes  should  be  continued  after  peace  is  established, 
not  only  for  the  pajraont  of  the  interest  of  the  public  clebt,  but  also 
for  its  extinguishment  at  some  time  or  other.  The  nation  Avhich  does 
this,  will  not  only  sustain  its  credit,  but  will  be  able  to  use  it  freely 
for  the  necessary  expenses  of  the  war. 

To  enable  the  Confederate  government  to  place  its  cretlit  upon  this 
solid  foundation,  it  was  necessary,  in  the  first  place,  to  take  steps  to- 
wards the  restoration  of  a  sound  standard  of  value,  by  reducing  the 
currency  within  proper  limits.  Accordingly,  a  currency  bill  has  been 
passed  at  this  session,  whose  object  it  was  to  absorb,  as  rapidly  as  pos- 
sible, with' our  means,  the  surplus  of  Tieasuary  notes,  in  circulation 
beyond  a  certain  amount,  by  holding  out  inducements  to  fund  them.  « 
To  do  this  it  was  provided  that  Treasury  notes  should  be  funded 
within  a  certain  time,  in  a  stock  bearing  a  larger  rate  of  interest  than 
if  funded  afterwards.  And  whilst  the  Treasury  notes  became  less 
valuable  after  a  certain  time,  if  not  funded  previously,  the  bond  was 
appreciated  by  the  fact  that  the  reduction  of  the  currency  in  volume 
could  increase  the  value  of  the  interest  on  the  bond  when  paid, in  that 
currency.  To  ensure  this  result,  an  issue  of  bonds,  supposed  to  be  of 
peculiar  value,  was  allowed  to  be  made  by  the  Secretary  of  the  Treasury 
for  the  purpose  ofbuying  up  their  notes  so  long  as  they  were  redundant. 
But,  notwitstanding  all  that  has  been  done,  it  is  obvious  that  to  give 
value  to  our  credit,  and  still  further,  to  appreciate  the  bond  in  which 
the  note  is  to  be  funded.  d!3c  other  measure  is  necessary  to  complete- 
the  series,  and  that  is  to  lay  a  tax  sufficiently  large  to  pay  the  interest 
on  our  debt,  and  the  expenses  of  the  government  other  than  those  oc- 
casioned by  the  war.  If,  th«n,  we  should  impose  a  tax  which  may  be 
enough,  not  only  for  this  purpose,  but  also  for  the  payment  of  one- 
third  of  the  expense  of  the  war  itself,  we  shall  set  an  example  which 
has  no  parallel  in  modern  history.  When  we  come  to  rellect  upon 
the  gigintic  scale  of  the  war  which  we  are  w  ging,  the  importance  of 
pucli  a  financial  achievment  will  be  still  more  highly  appreciated. 
Your  committee  believe  that  there  is  just  reason  for  the  hoj>e  that  the 
money  actually  raised  by  the  bill  as  proposed  to  be  amended  by  them- 
.Hclves  will  be  enough  to  pay  the  interest  due  on  our  debt  on  the  first 
of  January  next,  even  if  that  funded  debt  should  then  amount  to 
$6(10, Odd, (11)0,  and  also  the  civil  expenses  of  the  governinoiit. 

In  addition  to  this,  they  propose  a  tax  to  be  paid  in  kind  b}'  the 
agricultural  industry  of  the  country,  which  will  probably  be  enough 
to  furnish  the  forage,  the  bread  a?id  a  large  portion  of  the  meat  of 
the  army,  together  with  cotton  and  tobacco  enough  to  purchase  the 
foreign  exchange  necessary  to  pay  for  most  of  the  ordnance  stores 
whieh  we  procure  from  abroad.  If  we  do  this,  we  shall  probably 
pay,  in  addition  to  what  has  been  already  mentioned,  nearly  one- 
third  of  the  actual  expense  of  the  war  itself.      In  doing  this   we  shall; 


not  only  take  the  most  efficient  of  all  practicable  steps  to  reduce  tlie 
volume  of  our  currency,  by  diminishing  the  amount  issued,  but  we 
shall  secure  the  subsistence  of  the  army,  and  preserve  its  capacity  to 
keep  the  field,  happen  what  may  to  the  currency.  If  we  can  levy  the 
forac^e  and  subsistence  of  the  array  in  kind  from  the  people,  the 
amount  of  the  treasury  notes  to  Ije  issued  will  bo  so  much  diminished 
that  the  great  problem  of  reducing  the  currency  within  proper  limits, 
will  become  'capable  of  a  practical  solution.  But  whether  it  does 
or  not,  we  shall  secure  the  means  to  maintain  a  protracted  struggle, 
and  to  carry  on  the  war  so  long  as  our  S3'stcm  of  productive  industry 
continues  to  be  efficient.  That  such  would  be  the  effect  of  the  receipt 
of  these  supplies  in  kind,  no  one  can  deny.  •  ,    . 

The  doubt  arises  from  the  diOiculty  of  collecting,  transporting  and 
preserving  these  agricultural  products.  If  this  doubt  does  not  vanish, 
it  will  be  greatly  diminished  at  least  by  a  considerate  examination  of 
the  scheme  presented.  The  bill  proposes  to  levy  and  collect  a  ta.x  of 
one  tenth  of  the  annual  produce  of  the  corn,  wheat,  rice,  oats,  rye, 
barley,  sugar,  molasses  of  cane,  cotton,  tobacco,  wool,  peas,  beans 
cured  hay,  fodder  and  of  pork,  the  tithe  of  which  is  to  be  commuted 
for  bacon,  estimated  in  a  certain  manner  described  in  the  bill  itself. 
The  tithe  is  to  be  estimated,  collected  and  distributed  according  to  a 
■certain  scheme  which  will  now  be  considered. 

1st.  As  to  the  convenience  and  fairness  of  the  estimation  and  col- 
lection of  the  ta.x.  It  is  proposed  that  the  assessor,  as  soon  as  the 
■  crop  is  gathered,  shall  proceed  to  the  place  and  estimate  the  tenth  to 
which  the  government  is  entitled,  according  to  quantity  and  quality. 
\{'  there  should  be  a  disagreement  between  the  tax-payer  and  assessor, 
each  is  to  call  in  a  freeholder  of  the  vicinp^e,  and  they  are  to  select 
a  third  appraiser  in  case  of  dispute.  Their  award  is  final,  as  to  quan- 
tity, quality  and  value.  Duplicate  estimates  of  this  appraisement 
are  to  be  made  out,  one  to  he  left  with  the  tax-payer  an'd  one  with  the 
assessor.  This  estimate  is  left  by  the  assessor  with  a  post  quarter- 
.  master,  at  the  nearest  government  depot,  where  these  articles  are  to 
be  delivered  according  to  the  estimate,  within  a  certain  period  fixed 
by  law.  The  tax-payer  is  bound  to  deliver  these  articles  at  this  depot, 
but  is  not  to  haul  them  more  than  eight  miles  from  the  place  of  pro- 
duction. If  he  fails  in  this,  the  quartermaster  delivers  the  estimate 
to  the  lollector  who  shall  dispose  and  soil  enough  of  the  property  of 
the  tax-payer  to  cover  the  estimated  value  of  the  tithe,  the  interest, 
the  co.sts,  and  twenty  per  cent,  damages. 

^     The  assessment  is  thus  made  in  a   manner    acceptible  to   the    tax- 
payer, and  the  tithe  is  collected  with  certainty  and  dispatch. 

2d.  The  scheme  is  to  be  considered  in  reference  to  the  con- 
*'enience  and  facility  of  collecting  and  distributing  this  produce  so  far 
•as  tbe  government  is  concerned.  To  effect  this,  it  is  proposed  to  divide 
the  (juartermaster'a  department  into  two  branches,  one  for  the  col- 
Jectiou  and  the  other  for  the  distribution  of  these  articles.  The 
collectitig  branch  of  .the  service  is  to  consist  of  quartermasters  to  be 
^lenominated  post  quartermasters,  who  are  to  receive  and  preserve 
these  articles  an"d  to  deliver  them  upon  order  to  the  distributing  quar- 


tennaster,  who  will  transport  the  articles  of  subsistence  to  designated 
places,  there  to  be  transferred  to  the  agents  of  the  commissary's 
department.  The  forage  will  be  transported  by  the  distributing 
branch  of  the  service  to  the  array  and  the  cotton  and  tobacco  will  be 
carried  to  places  convenient  for  delivery  to  the  agents  of  the  Secre- 
tary of  the  Treasury.  And  here  two  queries  suggest  themselves: 
1st.  Can  these  articles  be  preserved  without  incurring  a  great  expense 
for  building  depots  '?  and  2d.  Are  the  transportation  resources  of  the 
quartermaster's  department  adequate  to  the  work  proposed  to  be  done 
by  it  ?  In  reply  to  the  first  doubt,  it  may  be  said  that  so  far  as  the 
preservation  of  these  articles,  in  merchant^able  order,  is  concerned, 
very  little  expense  is  required  in  the  erection  of  depots.  Corn  in 
the  ear  and  wheat  may  both  be  kept 'in  good  order  in  pens,  so  covered  as 
to  keep  out  the  rain.  This  is  a  matter  of  every  day's  experience  in 
many  parts  of  the  Confederacy.  A  mere  shelter  from  the  rain  is  all 
that  is  necessary  for  most  of  the  articles  of  agricultural  produce  which 
will  be  delivered.  The  sentinel  who*kecps  the  watch  will  be  able  to 
preserve  the  deposit  from  theft. 

In  response  to  the  second  question  it  may  be  said  that  the  quarter- 
master's department  isnoAv  collecting  from  the  farms  of  the  country  and 
distributing  to  the  army  the  agricultural  produce  which  it  purchases.^ 
The  work  which  would  be  required  from  it  under  this  bill  would  be 
less  difficult  than  that  now  performed"  by  it,  because  farmers  are 
required  to  deliver  it  at  depots  not  more  than  eight  miles  from  the 
place  of  production.  Thus  the  teams  of  the  farmer,  which  now  per- 
form but  little  of  the  transportation,  would  contribute  an  important 
part  of  the  service  under  the  requirements  of  the  proposed  law.  In 
addition  to  this,  the  arrangements  made  necessary  by  the  law  would 
introduce  more  system  into  the  service,  and  the  work  would  be  better 
done  than  it  is  at  present,  when  the  employment  is  desultory  instead 
of  being  regular  as  is  now  proposed.  But  the  conclusive  answer  to 
the  objection  is  to  be  found  in  the  fact  that,  with  the  exception  of  the 
portion  absolutely  necessary  for  the  farm,  nearly  the  whole  of  the 
transportation  of  the  country,  whether  it  be  don.e  by  s^cam  or  horse 
power,  is  in  the  hinds  of  the  government,  so  that  the  work  of  collect- 
ing and  distributing  this  produce  is  to  be  done  at  last  by  the  govern- 
ment. The  question,  then,  is  not  so  much  one  of  transportation  as 
whether  these  articles  are  to  be  purchased  by  the  government  or  taken 
by  taxation  in  kind. 

3d.  The  scheme  is  to  be  considered  in  reference  to  its  expense. 
Will  it  multiply  government  agents  to  an  inconvenient  extent  ?  The 
committee  arc  of  opinion  t  at  it  will  not.  The  assessors  and  colleor 
tors  who, are  necessary  for  the  assessment  and  collection  of  the  pecu- 
niary tax  will  be  able  to  discharge  also  the  additional  duties  imposed 
on  them  by  this  plan  for  a  tax  in  kind.  The  quartermaster's  depart- 
ment which  now  purchases,  c)llects  and  distributes  as  much  as  it  will' 
be  required  to  do  umier  thi^  bill,  will  be  adeijuate  for  the  performance 
of  this  work  also,  and  the  more  easily,  as  the  farmers  themselves  must 
contribute  a  share  of  the  necessarj  transportation.  It  may  be  sup- 
posed that  these  post  quartermasters  w^ould  constitute  an  additional! 


corps  of  officers.  Cut  there  are  two  considerations  which  wouhl  seem 
to  ne;i;aliv6  this  supposition.  The  fact  is,  that  already  there  are  con- 
fessedly quite  a  number  of  >upernuineraries  in  comuii.ssion  and  re- 
ceiving pay.  The  second  is,  that  those  who  now  perform  the  very 
service  required  by  this  bill  would  only  discharge  their  duties  more 
efficient!}'  when  'by  a  division  of  labor  a  greater  degree  of  system 
will  bo  introduced  into  the  work. 

If  all  this  be  so,  it  is  probable  that  there  is  no  other  mode  in  which 
so  greit  an  ad'lition  could  be  made  to  the  values  derived  from  taxa- 
tion with  less  expense  than  in  that  which  is  now  proposed.  Because 
the  increased  machinery  which  would  be  necessarily  erected  if  the 
Trensur}'  Department  had  to  collect  a  large  additional  amount  of  taxes, 
Would  he  substituted  in  this  casc  by  the  agencies  already  existing  in 
the  War  Department 

4th.  The  scheme  is  to  be  considered  in  reference  to  the  system  of 
accounts  by  which  fraud  is  to  b3f)revented  and  fidelity  is  to  bo  secured 
on  the  part  of  the  agents.  The  proposed  system  of  accounts  may  at 
least  be  said  to  be  free  from  complication.  Wlien  the  estimate  of  the 
tithe  is  made,  the  assessor  files  'hat  estimate  with  the  post  quarter- 
master, who  gives  a  receipt  in  exchange.  This  receipt  is  forwarded 
by  the  assessor  to  the  chief  tax  collector,  who  charges  it  to  the  post 
quaitermaster  in  his  account.  When  the  post  quartermaster  delivers 
the  articles  to  the  distributing  quartermaster,  he  t.ikes  a  receipt  which 
he  forwards  to  the  chief  tax  collector,  and  this  receipt  is  credited  in 
iiis  account.  If  the  tax  payer  fails  to  deliver  according  to  estimate, 
that  estimate  is  delivered  to  the  coll,ector  in  ex  hangc  for  a  receipt 
which  is  also  forwarded  to  tlic  chief  tax  collector,  who  is  thus  enabled 
to  trace  the  operations  of  the  post  quartermaster  at  any  time  by  a 
reference  to  his  books.  The  estimate,  whether  in  the  hauls  of  the 
ijuartermaster  or  district  collector,  is  also  forwarded  to  the  chief  tax 
collector,  who,  by  a  comparison  of  these  estimates  with  the  receipts 
itaken  by  the  assessor,  can  ascertain  whether  there  has  been  collusion 
between  the  assqssor  and  quartermaster  to  defraud  the  government  of 
any  portion  of  its  property. 

It  will  be  seen  that  a  strict  system  of  accountability  to  the  chief 
■tax  collector  is  thus  required  from  the  assessor  and  receiving  quarter- 
master, and  that  the  first  can  at  any  time  ascertain  the  exact  state  of 
;lhe  accounts  of  these  two  latter  officers  by  a  reference  to  iheir  books. 

5th,*  and  lastly.  The  j)lan  is  to  be  considered  in  reference  to  its  ap- 
'plicability  to  all  parts  of  tlie  c(/untry.  It  may  be  said  that  in  certain 
.sections  it  will  l^e  impossible  for  the  Secretary  of  War  to  collect  this 
produce,  because  it  is  so  distair  from  the  field  of  militaryoperations, 
and  from  the  armies  which  are  to  be  supplied.  Upon  reflection,  it  will 
be  fouml  that  such  cases  will  be  of  less  frequent  occurrence  than 
Avoul  I  at  first  be  supposed.  The  war  is  carried  on  upon  so  largo  a 
scile  that  the  armies  are  scattered  over  nearly  the  whole  country,  and 
are  thus  ready  at  most  places  to  gather  their  supplies.  But  when 
such  cases  actually  occur  the  bill  provides  a  remedy  for  them.  When- 
ever the  Secretary  of  War  shall  notify  the  Secretary  of  the  Treasury 
•that  there  are  certain    districts    in  which    it  will  be  impracticable  for 


him  to  gather  the  tithe,  the  law  requirea  that  the  estimated  money 
value  of  the  articles  constituting  this  tithe  shall  be  p  lid  by  the  farmer 
or  planter. 

If,  then,  upon  examination,  the  Senate  should  deem  the  proposed 
plan  practicable,  it  -will  find  that,  in  addition  to  the  reasons  already 
urged  in  its  favor,  there  are  other  considerations  which  should  recom- 
mend its  adoption.  If  the  effect  of  this  measure  would  be,  as  doubt- 
less it  would,  to  withdraw  the  government  to  a  great  extent,  if  not  en- 
tirely, from  the  market  as  a  purchaser  of  the  stores  proper  for  the 
subsistence  and  forage  of  the  army,  the  middlemen  would  bo  deprived 
of  one  of  the  leading  inducements  which  prompts  ihenvto  purchaee 
ard  hoard  the  necessaries  of  life.  Thej  will  no  longer  be  sure  of  one 
great  customer  who  must  buy  of  them  at  any  price.  The  necessary 
consequences  of  this  would  he  a  fall  in  the  prices  of  the  great  articles 
of  human  subsistence.  s?upplies  would  thus  bo  once  more  placed 
within»convenient  reach  for  the  people,  and  could  be  procure  I  on  fair 
terms  for  the  army  itself,  if,  to  some  moderate  extent,  it  should  be 
forced  to  go  into  the  market  for  them.  ^ 

That  the  tax  in  kind  would  enable  f  c  farmer  cr  planter  to  contri- 
bute largely  to  the  aid  of  the  government  with  more  ease  and  conve- 
nience than  in  any  other  mode,  is  so  obvious  as  to  require  no  argu- 
ment in  proof  of  the  proposition. 

If,  then,  upon  a  fall  examination  of  the  subject,  the  reasons  in  fa- 
vor of  a  tax  in  kind  should  be  found  suilicient.  but  little  more  need  be 
said  in  recommendation  of  the  general  features  of  the  scheme  propos- 
ed in  the  amendment  olTercd  l)y  your  committee. 

In  common  with  the  House,  they  propose  to  levy  a  license  tax  and 
duties  upon  the  gross  sales  of  merchants,  bacau.^e,  in  their  opinion, 
these  fall  as  a  tax  upon  the  consumer,  and  have  the  merit  of  all  such 
imposts  in  proportioning  the  burthen  to  the  actual  consumption,  and 
measuring  the  contribution  by  the  will  of  tlie  purchaser. 

But  instead  of  a  tax  falling  upon  all  property  alike,  whether  it  be 
productive  or  unproductive,  which  would  be  peculiarly  hard  at  the 
present  time,  your  committee  propose  to  tax  only  productive  property 
and  incomes  derived  from  all  sources  whatsoever,  for  it  is  believed  that 
a  much  larger  tax  could  thus  be  lai  I  and  collected  from  the  people 
than  in  any  othsr  mode.  That  the  contribution  will  be  made  more 
cheerfully  in  this  way  than  in  any  other  your  committee  dt»  not  doubt, 
bec:iuse  those  only  are  required  to  pay  who  are  able  to  do  so,  and 
nothing  is  exacted  from  those  who  make  nothing. 

It  now  remains  to  consider  what  will  be  the  probable  yield  of  these 
taxes.  Upon  this  subject  your  committee  regret  tliat  they  have  b  eh 
unable  to  obtain  such  statistics- as  would  afTord  the  basis  for  a  reliable 
estimate.  At  best  these  estimates  must  be  mainly  conjectural,  and 
'  when  furnished,  they  will  seem  rather  to  suggest  than  satisfy  enquiry. 
Still  they  may  be  able  to  describe  certain  limits  (wide,  to  be  sure,) 
within  which  the  amount  probably  to  be  yielded  by  these  taxes  will  be 
found.  This  enquiry  naturally  res(dves  itself  into  two  branches,  first 
as  to  the  money  which  the  proposed  bill  would  yield,  and  next  as  to 
the  value  of  the  tax  in  kind.     A  reference  to  table   No.  I,  appended 


8 

to  this  report,  -will  show  that  the  bill,  if  amemled  as  the  committee 
propose,  -will  probably  yield  about  $  65, 1)00, UO'J  in  money.  A  sum 
moie  than  sufficient  to  meet  the  interest  due  on  any  debt  which  may 
be  funded  on  the  1st  January  next,  and  to  pay  the  expenses  of  the 
government  incurred  for  purposes  other  than  those  for  the  war.  It  is 
extravagant  to  suppose  that  we  will  have  §600,000,000  in  funded 
debt  on  the  1st  January  next,  and  if  this  should  be  the  case,  all  of  it 
Would  not  bear  an  interest  of  8  per  cent.,  nor  would  the  interest  of  a 
^hole  year  be  due  upon  much  of  it.  But  if  there  should  be  $  48,000,- 
000  due  for  inte.rest  on  that  day,  $60,000,000  would  pay  not  only 
that  interest^  but  the  civil  expenses  of  the  government  besides.  In 
table  No.  II  will  be  found  an  estimate  of  the  }  ield  of  the  proposed  tax 
in  kind.  The  articles  thus  collected,  if  valued  at  present  prices,  will 
probably  amount  to  $  1 30,000,01:0,  which  will  be  in  addition  to  the 
money  derived  from  other  sources  as  specified  in  the  first  tabular 
statement.  Nor  does  this  estimate  give  the  true  value  of  tho^tax  to 
the  government,  because  that  value  is  to  be  measured  by  the  prices 
which  would  be  given  if  the  articles  had  to  be  purchased  with  a  cur- 
renc}'  constantly  increasing  in  volume.  In  other  words,  it  is  to  be 
measured  by  the  issue  of  treasury  notes  which  will  be  saved  by 
receiving  this  tax  in  kind.  But  the  proceeds  of  this  tax,  if  valued 
according  to  the  table,  will  pay  nearly  one  third  of  the  military 
expense  of  the  war  itself,  for  the  subsistence  and  forage  of  the  army 
constitute  about  thai  proportion.  If  we  do  this,  we  shall  thus  estab- 
lish our  credit  upon  the  respect  and  confidence  of  the  world,  and  we 
shall  certainly  give  a  new  value  to  it.  The  adoption  of  this  measure 
would  afford  to  the  world  such  evidence  of  our  determination  to  dis- 
charge our  just  ol)ligations  at  any  cost  as  would  necessarily  win  its 
confidence  and  inspire  respect.  With  a  credit  thus  established,  we 
should  be  able, to  use  it  for  all  the  purposes  of  the  war.  Whilst  the 
tax  in  kind  would  diminish  greatly  the  issue  of  notes,  the  bond,  when 
well  established  in  credit,  would  enable  us  to  control  the  amount  in 
circulation.  For  if  the  notes  wei'c  not  funded  with  sufficient  rapidity, 
we  miglit  purctiase  them  with  bonds,  so  as  to  bring  the  cir(;ula,tion 
within  proper  limits  and  reduce  prices.  From  a  reduction  of  prices 
there  v.ould  follow  a  diminution  of  the  debt  which  we  are  contracting, 
and  so  long  as  the  amount  of  the  debt  shall  be  equal  to  the  actual 
value  received,  we  shall  be  able  to  meet  whatever  liabilities  we  may 
incur.  But  a  reason  more  convincing  than  any  which  has  yet  been 
urged  recommends  the  imposition- of  a  tax  in  kind.  It  ensures  the 
means  of  prosecuting  the  war,  come  what  may  to  the  currency.  With 
food,  raiment,  antl  tlie  munitions  of  war,  we  can  and  will  protract  the 
contest  until  our  enemies  are  exhausted.  Defensive  war  has  this 
advantage  at  least,  an  advantage  which  would  promise  success  even  if 
the  inducements  to  fight  were  equal  on  both  sides.  But  when  a  spirit 
of  conquest  and  oppression  animates  one  party,  and  a.deteriiiination 
to  defend  home,  honor  and  liberty  directs  the  other,  there  can  be  no 
doubt  as  to  the  party  which  will  protract  the  contest  for  the  longest 
period.  Nothing  is  wanted  to  ensure  success  to  the  latter  but  the 
means  of  prosecuting  the  war.     We  have  these  means,  and  the  only 


question  is  as  to  iha  proper  use  of  them.  To  the  extent  that  we  col- 
lect what  we  want  in  kind  we  relieve  the  currency  by  diminishing  its 
issue,  and  wc  thus  avoid  all  the  inconveniences  which  might  arise 
from  a  failure  in  the  purchasing  power  of  the  currency  itself. 

R.  M.  T.  HUNTER, 
O/*  behalf  of  the  Commithe. 


InO.  I. 

Rstimnty  of  Mmey  rais  d  by  the  fux  proposed  in  thr    Amendment. 

["  .1.(100. 000  bales  cotton,  supposed  to  be  wort'i 

I  $i;)0,000.0',)0.      Of  tliis,    !-3    is  supposed    to 

,         j  be  in  s  cond  hands  :xnd  subject  to  a  tax  of  10 

^"■'    ]  percent.,  viv:  :  MO  of  $133,333,338.                    $13,333,333 

j  The  residue  in  hands  of  producer  ^2(i(»,(»o(i,- 

[  6G6,  at -o  percent.,             '                                /        .13,333,333 

f  250,000,000  lb.s.  Tobacfo  at  5')  els.  per  lb., 

I  are  worth  $125,000,000,  1-2   of  this,  or  $o2,- 

,,         '  500,000  supposed  to    be  in    second  hands  at  a 

^■'    \  a  (ax  of  10  per  ce^t.                                                       6,250,000 

I  $02,500,000  of  the   same    at  5  per  cent.,   in 

[  first  hands,                                                                         3,125,000 

[  Gross  sales  of  morcbandigc,  supposed  to  be 

(r.)     <5  $180,000,000  at  5  per  cent.,  woul.l    give  for  a 

[  whole  J  ear  $0,000,000;  for  8  mos.  from  Ist  Apr          6,000,000 

(//.)  10  per  cent,  on  $60,000,000  supposed  income           6,000,000 

,    .      ^  10  per  cent,   on   income  from  all  other  sources 

^'■■'      }  supposed,                                                                          12,000,000 

..        \  2  I -2  on  auction  sale.^,  supposed  to  be  $3;*. 000.- 

^^■^      (  000,                                      '                                                   500,000 

(^.)  1  pr  ct.  on  $38,000,000  cash  in  hand  at  borne,            380,000 

(A.)  3  pr  ct.  on  $38,000,000  .-.upposed  to  be  abroad,         1,140,000 

(/.)  License  tax,  supposed  to  be                                                500,000 

f  II  rses,  mules  and  asses,  1,500,00!)    at   $120 

(k.)    <(  are  worth  $180,!)00. 000,    upon  which   a  tax  of 

[  I  per  cent  will  yield,                                                        l,8'.)O,OO0 

\  Neat  cattle,  7.000,(}00  at  $2.0,  $1.10,000,000 

i  1  per  cent  tax,                                                                  1,400,000 


(O 


$65,761,606 


NOTES. 


(«.)  The  cottrn  crop  of  1360,  accordino;%to  the  census  for  that 
year,  was  5,192.756  bales  at  40(1  pounds  each  The  crop  of  1561  is 
supposeil  to  have  been  nearly  as  large.  That  of  1862  has  been 
reckoned  at  1,250, 0(fO  bales.  Wben  we  reflect  that  for  some  time 
before  1st  August,  1861,  when  the  crop  would  have  been  shipped 
usually,  the  sale  of  cotton,  both  to  the  Unfted  States  and  Europe  was 
stopped,  and  that  since  then  a  comparatively  small  quantity  haa  been 


u 

shipped,  ^e  shall  find  reason  to  believe  that  after  making  a  liberal 
deduction  for  what  has  been  destroyed,  there  are  probably  more  than 
4. 000, out  I  bales  now  on  hand.  The  estimated  price,  too,  of  twenty- 
five  cents,  is  far  below  that  ruling  generally  in  our  markets.  This 
estimate,  then,  is  probably  below  the  truth, 

{b.)  The  census  of  I8G0  shows  for  that  year  a  crop  of  190,021,430 
pounds  of  tobacco.  The  crop  of  18GI  was  nearly  as  great,  being 
equal  at  least  to  two- thirds  of  that  amount,  or  about  133,333,000 
pounds.  The  crop  of  18G2  is  supposed  to  be  about  100  000,0  0 
pounds.  As  tobacco  is  not  generally  shipped  until  about  the  month 
of  June,  probably  these  cmps  are  all  on  hand  except  what  h;vs  been 
consumed  at  home.  A  liberal  deduction  has  been  made  for  this.  The 
estimated  price,  too,  is  only  for  the  leaf  tobacco,  whereas  the  tax 
operates  in  manufactured  tobacco  also,  Avorth  $1  o'J  to  $3  50  per 
pound  ;   s©  that  this  estimate  is  also  low. 

(r.)  The  capital  invested  in  merchandise,  in  nine  of  the  Confederate 
States,  [Tennessee  and  Alabama  not  being  included]  during  the  year 
1861,  as  ascertained  by  the  assessment  for  the  war  tax,  was 
$60,000,000.  Supposing  this  to  he  turned  over  twice  in  the  year, 
and  at  a  profit  yielding  fifty  per  cent,  nett,  we  have  §180,000,00(j, 
subject  to  two  and  a  half  per  cent,  in  the  hands  of  the  wholesale,  and 
as  much  in  the  hands  of  the  retail,  or  five  per  cent,  in  the  whole. 
The  portion  of  territory  lost  since  then  cannot  represent  as  much 
mercantile  capital  as  is  contained  in  the  two  omitted  States. 

(d.)   Explained  in  (r.) 

{<■.)  This  item  includes  first,  the  revenue  from  banks  and  railroads, 
having,  according  to  the  assessed  returns,  more  than  double  the  capi- 
tal invested  in  merchandise  ;  the  banks  having  $88,761,909  and  the 
railroad  $30,813,208.  Secondly,  the  profits  from  all  manufactures, 
from  all  speculations  by  way  of  purchase  and  sale,  from  all  employ- 
ments and  occupations  of  every  description,  and  from  rents,  hires, 
and  also,  the  incomes  of  all  individuals.  To  this  must  be  added  the 
income  from  ;$  147,863,000  at  interest,  as  shown  by  the  same  returns. 
When  it  is  remembered  tha:  Tennessee  and  Alaba^raa  are  excluded 
from  these  assessment  returns,  it  will  probably  be  agreed  t'.  at  this 
estimate  is  also  low. 

(/)  This  is  a  mere  estimate,  but  the  amount  is  small,  not  seriously 
affecting  sum  total. 

{g)  Reported  amount  according  to  assessment  returns. 

(  h  )  The  same  amount  valued  at  three  for  one  as  the  rate  of  foreign 
exchange.     This  supposed  amount  is  probably  below  the  real  sura. 

( /.  )  This  is  an  estimate  supposing  $12,001)  to  be  the  average  capi- 
tal of  each  dealer,  then  $60,000,000  of  capital  would  represent  5,000 
persons.  This.  ;Vt  an  average  of  $60  for  each  license,  would  give 
$300,000.  It  is  a  mere  supposition  that  the  license  tax  upon  all 
other  per.^ons  would  be  equal  to  $200,000,  But  here  again  the  amount 
is  small  and  would  not  seriously  affect  the  sura  total. 

(A;.)  In  this  matter  the  most  reliable  information  is  to  be  had  from 
the  census  returns  of  1850.  The  number  of  the^e  animals  then  in  the 
Confederacy  was  1,826,000.     The  incrtase  from  1850  to  1860  at  the 


18 

rate  of  increase  from  1840  to  1850  would  have  been  342,601  malcing 
in  all  2,108.837  as  the  probable  number  in  ISGO.  Of  these,  640i000 
wer«  in  Tennessee  and  Virginia.  Deducting,  then,  one  half  of  this 
number  for  the  portions  of  these  States  occupied  by  the  enemy,  we 
have  about  1,846,000.  Deducting  again  346,000  for  the  waste  in' 
these  animals  and  throwing  out  of  consideration  the  increase  for  two 
years,  we  have  the  number  given  in  the  table.  That  the  estimated 
.price  is  low  will  be  generally  admitted. 

( /.  )  The  census  of  1850,  shows  7,916,990  neat  cattle  in  the  Con- 
federacy. Supposing  the  rate  of  increase  from  1850  to  1860  to  have 
been  cfjual  to  the  rate  of  increase  from  1810  to  18511  there  ought  to 
have  been  in  I860,  9,3  12,060.  Deducting,  then,  for  the  waste  of  war, 
2,342,050,  and  throwing  out  of  consideration  the  increase  since  1860, 
we  have  the  number  givcri  in  the  table.  The  deductions  are  believed  to 
be  ample  and  the  price  estimated  is  certainly  low.  The  one  per  cent 
on  the  value  of  the  whole  is  believed  to  be  about  one-tenth  of  the 
valiie  of  the  increase.  McQueen  (statistics  of  British  Empire  p.  IS) 
represents  the  permanent  stock  of  United  Kingdom  at  14,000,000,  and 
to  replace  waste  one-tenth,  1,400,000. 


TABLE  NO.  II. 

Estimated  proceeds  of  tax  in  kind,  and  value  thereof. 

(a.)     Corn,  28,066,500  bushels,  at  $2  per  bushel,  $56,133,000 

(6.)     Wheat,  2,1 16,000  bushels,  at  $S  per  bushel,  6,348,000 

(c.)     Rye,  217,300  bushels,  at  $2  5t)  per  bushel,  543,250 

{d.)     Oats,  2-,000,i)00  bushels,  at  $2  per  bushel,  4,0lt(\000 

(e.)     Rice,  6.000,000  pounds,  at  20  cents  per  pound.  1,200, 000 

(/•)     11*7'  1,06,900  tons,  at  $5i)  per  ton,                       "  5,345,000 

(,?.)     Fodder,  106,900  tons,  at  $50  per  ton,    .               .  5,345,000 
.(/i.)     Bacon,   50,800,000  pounds,   at  5i) 

cts.  per  pound  •  $89,400,000 

From  which  deduct  for   corn    and 

salt,  ^  4,200,000 

25,21)0,000 

(/.)     Wool,  67(),000  pounds,  at  $1    50  per  pourfd,  l,0o5,000 

(A;.)      Sugar,  100,000  hogsheadi-,  at  $2  per  hogshead,  2,000,000 

(l.)     Cane  molasses,  540,000  gal's.,  at  $1  per  gallon,  510,000 

{m.)     Cotton,  125,000  bales,  at  $120  per  bale,  15,000,000 
(n.)     Tobacco,    10,000,000    pounds,   at   50   cents  per 

pound,  5,000,tl00 
(o.)     Peas   and  beans,    1,155,000  bushels,   at  $2   per 

bushel,  2,310,000 

$129,969,250 


13 

NOTES. 

(a.)  This,  is  the  tithe  of  tlie  crop  as  shown  in  census  of  I8G0.  No 
deduction  is  made  for  territory  occupied  bj  tlie  enemy,  because  it  is 
believed  that  the  increased  breadth  of  Lint]  about  to  be  put  in  com 
will  much  more  than  make  up  for  w\y.\t  is  lost  from  that  source. 

{b.)  This  is  the  titlie  of  the  c  op  re[)orted  in  the  census  of  I860, 
after  deducting  half  of  the  crop  of  Virginia  and  Tennessee,  for  por- 
tions of  those  States  occupie<l  by  the  eneiiiy.  Here,  too,  the  deduc- 
tion is  probably  ample,  as  in  the  other  States  more  than  the  usual 
amount  of  wheat  has  been  sown.  The  estimated  price  is  certainly 
below  the  market  value. 

(c.)   This  is  the  tithe  according  to  the  census. 

(d.)  Tithe  according  to  the  census. 

{e  )  Tithe  according  to  the  census, -after  deducting  two-thirds  for 
country  occupied  by  the  enemy. 

{/.)  Tithj  according  to  the  census. 

(g.)  It  is  believed  that  the  quantity  of  fodder  greatly  exceeds  that 
of  the  hay  in  the  Confederate  States,  but  only  the  same  weight  ia 
here  estimated. 

( /i  )  To  estimate  the  swine,  Ave  are  forced  to  recur  to  the  census  of 
1850.  There  were  then  I5,8!)4.38'»  swine  in  eleven  of  the  Confede- 
rate States ;  estim.ating  their  increase  between  1850  and  I860  at  the 
rate  of  increase  from  1840  to  1850  there  ought  to  have  been  in  1860, 
19,597.331  swine  in  those  States.  Deducting  one  half  the  swine  of 
Virginia  and  Tennessee  2,500,000,  and  n  U  only  throwing  out  of  con- 
sideration the  increase  since  1860,  but  deducting  also  2.097.000  for 
the  waste  of  war  an<i  other  causes,  we  have  a  residue  of  15,0'.'0,000, 
supposing  2-5  of  these  to  be  sl:iughter«Hl,  and  to  average  one  hundred 
and  forty  pounds  each,  the  tithe  wouKi  give  600,000  hogs,  weighing 
84,00i),000  pounds  of  pork,  ecpial  to  5S,S00,000  poun<ls  bacon,  as 
estimated  by  the  bill.  Deducting  four  bu-hcls  of  corn,  at  two  dollars 
per  bushel  for  every  one  hundred  pounds  of  pork,  and  one  busliel  of 
salt  at  ten  dollars  for  every  one  thousarid  pounds  of  pork  salted,  we 
have  the  sum  stated  in  the  table. 

{i.)  The  wool  is  taken  from  the  census  of  lS6i), after  deducting  3-4 
of  the  clip  of  Virginia  and  Tennessee,  sis  the  best  wool-growing  region 
of  Virginia  is  in  the  hands  of  the  enemy. 

{k)  Taken  from  the  cen.<u-  on  the  supposition  that  1-3  of  the  crop 
is  available  to  us. 

(/.)   Same  supposition  as  above. 

( w  )  This  supposes  only  I.2j0,();)0  bales  to  bo  made  during  the 
present  year. 

(71.)  This  estimates  1-2  the  crop  of  186!).  But  onf>  St.ate  has 
limited  by  law  the  quantity  of  land  to  be  cultivated.  But  the'  best 
land  and  the  highest  culture  will  probably  be  given  to  the  crop  thus 
limited,  and  in  the  othor  vStates  th-re  is  no  liui'it  imposed  bylaw.  The 
estimated  price  allows  nothing  for  a  future  rise,  to  be  increased  pro- 
bably by  a  diminished  production. 


!4 


( 0.)  The  crop  of  peas  and  beans  made  during  tbo  present  year  will 
probably  be  much  greater  than  that  of  TSHO. 


KKMARK. 


There  is  probably  no  price  estimati'd  m  liiis  iable  whi^-h  is  not  sen- 
eiblv  lower  than  the  market  rate. 


